Nguyen Q TO: Proximity mobile team
FROM: Truc Quynh Nguyen
DATE: March 4, 2010 SUBJECT: AT&T strategy analysis
Here is my AT&T strategy analysis. AT&T is one of the powerful companies in the communications industry; therefore, it carries such a big pressure in order to maintain the great reputation. Providing smartphones or attractive deals are among its strategy. However, are those attractive enough to appeal Gen Y users to adopt or switch from what they already had? The answer still depends on a special uniqueness that AT&T provides
Profile
AT&T is the largest communications company and provider of local and long distance telephone services in the United States, and also sells digital subscriber line Internet access and digital television service. Plus, AT&T is a second largest international coverage of any U.S wireless carrier. AT&T, Inc was founded in 1983 as SBC Communications Inc. In 2005, it purchased the former “Ma Bell” AT&T Corporation, and changed it to the present form (Wikipedia 2010). Contemporary AT&T’ CEO is Randall Stephenson (Los Angeles Times 2010).
AT&T's revenues come from three sources:
· Wireline services have three core sources of revenue ( voice, data and other services) · Wireless services provide local and long distance wireless communication voice and data services · Advertising and publishing business include all of it directory services with traditional phonebooks and electronic, and internet publishing. Yellow and White Pages are still its dominant in the market
At present –day, AT&T has over 85.1 million wireless customers, and more than 150 million total customers. Due to the acquisition of Bell South and increased sales of data products, its revenue in Fiscal Year 2008 was $124 billion which increased 4.3% in total revenue and 7.7% in net income compare to previous year (Wikinvest 2010).
Competitive Landscape
Even though AT&T is dominant in market share, it is losing its customers to a few strong competitors. The primary force driving competition in the communications market is long distance service provider. While other providers are trying to lower the price for their services, AT&T’s primary efforts are to minimize cost in order to offer the lowest service’s price. That way can help it retains consumers (Telecommunications Industry 2010).
AT&T is also facing a fierce competition with other powerful substitute products such as Verizon’s ( BlackBerry Storm 2, Motorola Droid, or Palm Pre Plus) and T-Mobile ( Google Nexus One) (PC 2010).
AT&T Strategy AT&T is positioned to offer competitive pricing to the numerous services it offers such as rollover minutes, family unity plan. Besides, AT&T cooperates with Apple Corporation to be a sole agent of iPhone which has differentiated itself from others
Recently, AT&T has announced that it would stop promoting its local and long-distance services to customers. Its new plan is focus only on big business customers, which is 75% of overall revenue. This strategy is expected to save about $1 billion a year for AT&T (USA Today 2010).
Gen-Y implications
Although AT&T “is still the No. 1 long-distance company with more than 30 million residential customers” (USA Today 2010), no one knows for sure if it can remain as a dominant communications company in such a fierce industry.
I think AT&T’s challenge is to find another strategy when its contract with Apple Corporation is over. The iPhones have brought a considerable amount of its consumers by thousands of useful and incredible applications. iPhone is still attractive enough for users to switch from one to another as long as AT&T offers a reasonable price or good sales promotions. It has to make consumers willing to switch when they compare to what they have. Appealing Gen-Y users to adopt or switch to AT&T, it could be not an easy mission, but it could be possible.
TO: Proximity mobile team
FROM: Truc Quynh Nguyen
DATE: March 4, 2010
SUBJECT: AT&T strategy analysis
Here is my AT&T strategy analysis. AT&T is one of the powerful companies in the communications industry; therefore, it carries such a big pressure in order to maintain the great reputation. Providing smartphones or attractive deals are among its strategy. However, are those attractive enough to appeal Gen Y users to adopt or switch from what they already had? The answer still depends on a special uniqueness that AT&T provides
Profile
AT&T is the largest communications company and provider of local and long distance telephone services in the United States, and also sells digital subscriber line Internet access and digital television service. Plus, AT&T is a second largest international coverage of any U.S wireless carrier. AT&T, Inc was founded in 1983 as SBC Communications Inc. In 2005, it purchased the former “Ma Bell” AT&T Corporation, and changed it to the present form (Wikipedia 2010). Contemporary AT&T’ CEO is Randall Stephenson (Los Angeles Times 2010).
AT&T's revenues come from three sources:
· Wireline services have three core sources of revenue ( voice, data and other services)
· Wireless services provide local and long distance wireless communication voice and data services
· Advertising and publishing business include all of it directory services with traditional phonebooks and electronic, and internet publishing. Yellow and White Pages are still its dominant in the market
At present –day, AT&T has over 85.1 million wireless customers, and more than 150 million total customers. Due to the acquisition of Bell South and increased sales of data products, its revenue in Fiscal Year 2008 was $124 billion which increased 4.3% in total revenue and 7.7% in net income compare to previous year (Wikinvest 2010).
Competitive Landscape
Even though AT&T is dominant in market share, it is losing its customers to a few strong competitors. The primary force driving competition in the communications market is long distance service provider. While other providers are trying to lower the price for their services, AT&T’s primary efforts are to minimize cost in order to offer the lowest service’s price. That way can help it retains consumers (Telecommunications Industry 2010).
AT&T is also facing a fierce competition with other powerful substitute products such as Verizon’s ( BlackBerry Storm 2, Motorola Droid, or Palm Pre Plus) and T-Mobile ( Google Nexus One) (PC 2010).
AT&T Strategy
AT&T is positioned to offer competitive pricing to the numerous services it offers such as rollover minutes, family unity plan. Besides, AT&T cooperates with Apple Corporation to be a sole agent of iPhone which has differentiated itself from others
Recently, AT&T has announced that it would stop promoting its local and long-distance services to customers. Its new plan is focus only on big business customers, which is 75% of overall revenue. This strategy is expected to save about $1 billion a year for AT&T (USA Today 2010).
Gen-Y implications
Although AT&T “is still the No. 1 long-distance company with more than 30 million residential customers” (USA Today 2010), no one knows for sure if it can remain as a dominant communications company in such a fierce industry.
I think AT&T’s challenge is to find another strategy when its contract with Apple Corporation is over. The iPhones have brought a considerable amount of its consumers by thousands of useful and incredible applications. iPhone is still attractive enough for users to switch from one to another as long as AT&T offers a reasonable price or good sales promotions. It has to make consumers willing to switch when they compare to what they have. Appealing Gen-Y users to adopt or switch to AT&T, it could be not an easy mission, but it could be possible.
References.
Wikipedia. Web. 25 Feb. 2010. <http://en.wikipedia.org/wiki/AT%26T>.
Milian, Mark. "Telecoms Continue Move to Metered Internet, AT&T CEO Says." Los Angeles Times. 03 Mar. 2010. Web. 03 Mar. 2010. <http://latimesblogs.latimes.com/technology/2010/03/att-metered-internet.html>.
Martos, Matthew, Ben Hur Gomez, and William Haddad. "AT&T." Wikinvest. Ameritrade. Web. 1 Mar. 2010. <http://www.wikinvest.com/stock/AT&T_(T)>.
"Telecommunications Industry." Web. 1 Mar. 2010. <http://www.csustan.edu/manage/harris/industry4.html>.
Segan, Sascha. "The Best Verizon Smartphones." PC. 1 Feb. 2010. Web. 1 Mar. 2010. <http://www.pcmag.com/article2/0,2817,2358563,00.asp>.
Cauley, Leslie. "AT&T Rings in a New Business Strategy." USA Today. 8 Aug. 2004. Web. 1 Mar. 2010. <http://www.usatoday.com/money/industries/telecom/2004-08-08-att-cover_x.htm>.